Open AccessOvercoming the comparative confusion of the audit committee’s impact on the financial performance of conventional and Islamic banks: An international evidence in a framework of agency theory
Author(s) -
Achraf Haddad,
Mohamed Naceur Souissi,
Abdelfattah Bouri
Publication year - 2021
Publication title -
international journal of finance
Language(s) - English
Resource type - Journals
ISSN - 2520-0852
DOI - 10.47941/ijf.712
Subject(s) - audit committee , accounting , audit , joint audit , principal–agent problem , islam , sample (material) , business , agency (philosophy) , corporate governance , audit evidence , confusion , quality audit , panel data , actuarial science , finance , internal audit , economics , sociology , psychology , philosophy , chemistry , theology , chromatography , econometrics , social science , psychoanalysis
Based on the banking and governance literature, the impacts of the audit committee quality on the financial performance of conventional and Islamic banks are mixed, unstable and sometimes contradictory. In this study, we consulted deeply the theoretical foundations of the audit committee quality on the financial performance of conventional and Islamic banks to solve the ambiguity of comparison in a framework of agency theory. Measures of financial performance and audit committee determinants are collected from 30 countries. Under the panel data estimations, data were collected from 112 banks of each type that have published their reports regularly during the period (2010-2019). Overall, we obtained 1120 bank-year observations in each sub-sample. The results showed that the audit committee in conventional banks negatively affected their financial performance. However, in Islamic banks, it revealed a vague impact because of his secondary role.